Ontario Teachers' infra portfolio falls C$2.1bn

The portfolio is now valued at C$7.9bn, versus C$10bn at the end of 2008. The Canadian pension also said the portfolio's -5.5% return in 2009 occurred ‘largely because’ of the sale of its interest in the Macquarie Infrastructure Group.

The Ontario Teachers’ Pension Plan’s infrastructure and timberland portfolio fell by $2.1 billion in 2009, totaling C$7.9 billion (€5.9 billion; $7.9 billion) as of the end of the year, according to results published this week.

The C$96.4 billion pension said the change in the portfolio’s valuation occurred “largely because” of the sale of its shares in Macquarie Infrastructure Group, the former toll road investment arm of Macquarie Group. Ontario Teachers’ Pension Plan (OTPP) exited its approximately 11 percent interest in the fund shortly before it disclosed plans to split its portfolio according to risk profile.

Other OTPP infrastructure investments throughout the year included its acquisition of a 35.5 percent stake in UK’s Bristol Airport and the divestiture of its 3.9 percent interest in Copenhagen Airport.

Overall, the infrastructure and timberland portfolio returned a -5.5 percent performance for 2009, compared with a benchmark return of -1.0 percent. The benchmark is a blend of the consumer price index and a 4 percent country risk premium.

Despite this, the pension still posted a 13 percent annual return, which equates to C$10.9 billion in investment earnings for the course of the year. OTPP credited the gain largely to a “market rebound” as a result of the return of investor confidence. This was most evident in the pension’s equities portfolio, which totaled C$41.2 billion at the end of 2009, versus C$34.9 billion a year earlier.

Within the equities portfolio, though, private equity investments struggled, posting a -2.8 percent for the year against a 13.2 percent benchmark. The portfolio was valued at C$10 billion as of 31 December 2009, versus C$9.9 billion a year earlier.

OTPP’s real estate investments fared better, yielding a 7 percent return against a 6 percent benchmark in 2009. The portfolio increased by $1 billion from one year ago, totaling C$17.2 billion at the end of 2009.